In politics, lawmakers returned to Capitol Hill this week. One important piece of legislation to deal with is the 2012 farm bill. The Senate passed its version, as has the House Agriculture Committee, but the full House has yet to vote on it.

Both versions include reforms to the U.S. dairy safety net policies, including the elimination of the Milk Income Loss Contract (MILC) and the Dairy Price Support programs. Both bills would replace them with a two pronged safety net program, one part being the Dairy Producer Margin Protection Program (DPMPP) and the second being the Dairy Market Stabilization Program (DMSP).

National Milk and more than a dozen other agricultural organizations urged Senate leaders to “refrain from supporting” any legislation resembling the House-passed disaster bill if such a measure is presented. Supporting such a measure would detract from the larger mission of passing a long-term 2012 Farm Bill, they said, and a public rally featuring speakers from the Senate, House, and various other farm organizations was held Sept. 12 to lobby lawmakers to pass a farm bill before Sept. 30.

In late breaking news Thursday, Dairy Profit Weekly (DPW) reported that U.S. Rep. Bruce Braley (D-Iowa) filed a bipartisan “discharge petition” which could force House floor consideration of a 2012 farm bill proposal. The petition was filed after House Speaker John Boehner (R-Ohio) allowed the House Ag Committee’s proposal to be reported from committee. Immediately, Rep. Braley formally introduced his bipartisan discharge petition, signed by 38 other House members. If at least 218 House members sign the petition, leaders are forced to bring the legislation to the floor for a vote.

“While the discharge petition advanced by Congressman Braley is certainly an unorthodox tactic, we are now forced to support this drastic measure, said American Soybean Assoc. (ASA) President Steve Wellman, a soybean farmer from Syracuse, Neb. Details are available at www.dairyline.com

Checking the markets, cash block cheese closed the second Friday in September at $1.8725 per pound, up 4.25 cents on the week and 9.5 cents above a year ago. Ten offers went uncovered Friday. Barrel closed at $1.8275, up 5.25 cents on the week and 10.75 cents above a year ago. Eighteen carloads of block found new homes on the week and 12 of barrel. The AMS-surveyed U.S. average block price inched to $1.8533, up 0.6 cent, while the barrels averaged $1.8330, up 0.1 cent.

Food service demand is showing added interest in cheese with most schools back in session, according to USDA’s Dairy Market News. While domestic demand is good, export interest is weaker as U.S. prices are above international prices in many cases. 

Export sales are being assisted by the CWT program which announced that it accepted 11 requests for export assistance this week to sell 3.337 million pounds of cheese and 385,809 pounds of butter to customers in Asia and the Middle East. The product will be delivered through February 2013 and raised CWT’s 2012 cheese exports to 82.4 million pounds, 57.1 million pounds of butter, and 123,459 pounds of anhydrous milk fat to 34 countries.

The Daily Dairy Report (DDR) says U.S. exports of nonfat dry milk (NDM) slowed in July, down 19 percent from July 2011 and 21 percent lower than June 2012 after adjusting for the number of days in the month. 

USDA’s Foreign Agricultural Service says U.S. NDM exports for the first seven months of the year were 7 percent higher than a year earlier. July exports to Mexico, the largest importer of U.S. NDM, were down 22 percent from July 2011 and off 24 percent from the prior month. Year-to-date exports to Mexico are up 22 percent and account for 41 percent of NDM exports. Exports to China for January to July were 48 percent higher this year than in 2011, and account for 4 percent of NDM exports, according to the DDR.

In general, exports to major NDM importers in Southeast Asia excluding China are lower than last year and the DDR pointed out that the U.S. appears to have lost market share to New Zealand, where milk powder exports were very strong in July. European exports have been firm all year, but the U.S. and Europe are approaching seasonal lows in NDM production. 

The DDR warned that the U.S. could lose more market share in coming months as New Zealand enters peak production and spot prices of U.S. dairy products remain higher than world prices. 

Mary Ledman, editor of the DDR, addressed some revisions in several types of cheese production for the first half of 2012 by USDA in their recent Dairy Products report but particularly in Cheddar. She reported that Cheddar output was lowered 41.2 million pounds or 2.5 percent, “a significant revision.” The reason given, she said, was that a plant reported all of their cheese as Cheddar when in fact it produced several varieties.

2012 and 2011 Cheddar production was overstated and the revision for the entire year was down 45.2 million pounds. She talks about it in her Daily Dairy Discussion which is a free download every Friday at www.dailydairyreport.com

Jerry Dryer also wrote about the revisions in his Sept. 7 Dairy and Food Market Analyst. He reported that the big revision was Gouda production which was originally reported as American cheese. 

“USDA’s first estimate, published in April said Gouda output in 2011 totaled 16.2 million pounds. After the revisions, output stood at 65.7 million. Gouda production has increased dramatically in recent years because it is the cheese of choice among overseas customers.” Dryer wrote. “Historically, Europe supplied these buyers with gouda cheese for processing.” 

Readers with questions or comments for Lee Mielke may write to him in care of this publication.